Report: Lord in Taylor in talks to buy flagging Fortunoff
January 31, 2008
By Mary Wisniewski
Westbury, N.Y.—
Lord and Taylor is close to buying
Fortunoff, the jewelry and home furnishings retailer teetering on the edge of bankruptcy,
The New York Times reported on Thursday.
According to the news source, the department store chain wants to put Fortunoff merchandise in all 47 of its stores, as well as open a Fortunoff boutique within Lord and Taylor's flagship Fifth Avenue location in New York City.
Lord and Taylor's parent company, private equity firm NRDC Equity Partners, would make the acquisition, but negotiations are still pending,
The Times said.
Women's Wear Daily (WWD) earlier reported that Fortunoff might be considering Chapter 11 bankruptcy protection among other reorganization options, amid difficulties in paying bills over recent weeks.
In response to queries about the
WWD report, Fortunoff provided
National Jeweler with the following written statement:
"Fortunoff has been and is continuing to work with its financial advisors to consider the complete range of strategic alternatives for the company. Our stores are fully staffed and open for business as usual, and we remain committed to serving our customers."
Founded by Max and Clara Fortunoff, the company has been in business since 1922.
In 2004, Fortunoff announced its decision to sell a majority stake of the company to private investors Trimaran Capital Partners and K Group. The Fortunoff family retained a minority stake in the company, where family members keep key executive positions.
The
WWD report indicates that since Fortunoff was sold to the private equity group, factoring firms stopped assessing the creditworthiness of the company since they were no longer receiving financial information. Hence, Fortunoff was receiving merchandise from vendors who took the risk that they might not get paid—a risk many were willing to take given Fortunoff's reputation for always paying its bills, the
WWD report said, citing industry sources.
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